Decline in Eurozone construction sector eases
The decline in the Eurozone’s construction sector eased significantly in June, survey data has shown, as economies reopened from coronavirus lockdowns.
The closely watched IHS Markit Eurozone construction activity index rose sharply to 48.3 in June from 39.5 in May. This was the best reading since February, indicating that the sector is on its way back to normality.
A score below 50 officially indicates that the sector is still contracting. However, many economists have said IHS Markit’s gauge should not be read too literally and that things are likely improving in the Eurozone.
Bernard Aw, principal economist at data firm IHS Markit, said: “Amid an easing of Covid-19 measures, the downturn in eurozone construction activity eased markedly in June.”
“The total activity index recovered further ground, thanks to increased construction output in France and Italy.”
Yet Aw said that things were far from rosy for Eurozone construction in June. “Construction demand remained weak, with new orders falling at a sharp pace in June despite easing further from April’s collapse.”
Firms continued to cut back on their buying and once again reduced staff number. The rates of decline were not as severe as in previous months, however.
Aw said: “A further recovery is by no means assured, and could easily reverse direction.” He added: “Business expectations about the 12-month outlook remained pessimistic, partially reflecting the ongoing impact of Covid-19 pandemic on demand and investment.”
Despite persistent economic worries, European stock markets moved sharply higher on Monday. Germany’s Dax was up 2.1 per cent and France’s CAC 40 was two per cent higher.